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Vince Cable

Most politicians are notoriously busy people and Liberal Democrat Shadow Chancellor Vince Cable admits he struggles to get his work/life balance right.

The MP for Twickenham is also the LibDem deputy leader and the beginning of next month sees the publication of The Storm, his book on the economic crisis and its fallout. In November, his autobiography will be published and he is then committed to writing a series of books.

In between politics and writing, he still has time to fit in his great passion, which is ballroom and Latin dancing, and he has well documented aspirations to appear on Strictly Come Dancing.

Cable initially studied natural sciences at Cambridge University but switched to economics as he did not like the idea of spending his afternoons in laboratories. He was intensively involved in politics and became president of the Cambridge Students’ Union.

He has had a varied career, starting by working for the Kenyan treasury in Nairobi where he met his first wife, who died in 2001.

In 1968, he moved to Glasgow where he led a “double life” teaching economics at the university while also serving as a Labour councillor. He quit the Labour Party for the Social Democratic Party when it was formed in 1981.

After a stint in the diplomatic service, he spent some time at a thinktank and became special adviser to former Labour leader John Smith. He also spent a large part of his career at Shell, becoming its chief economist in 1995 before moving into politics full-time in 1997.

As one of the few dissenting voices to warn of the dangers of the credit boom, Cable has become a respected economic commentator and says there are no silver bullets to solve the banking crisis.

“I would acknowledge that none of us has a comprehensive knowledge of what needs to be done. I have some ideas but I do not pretend we know all the answers.”

Cable supports low interest rates, quantitative easing and the fiscal stimuli that have been put in place but he feels the VAT cut was wasteful and would rather have seen some targeted public investment instead.

“But the biggest thing is that the Government has invested all this money in the banking system recapitalisation and guarantees but it has not got effective control of the banks.

“As a consequence, they are not doing what should be done, which is to maintain and increase the flow of lending to sound British companies, sorting out abuses like large-scale tax avoidance and the remuneration packages, separating out the bad debts and identifying them and then preparing banks for reprivatisation in due course. None of this is happening because the Government seems to be caught a bit like a rabbit in headlights.”

Even if the global crisis had not occurred, Cable is convinced there would have been a serious downturn in the UK because of the residential property bubble and the indebtedness of households.

“I blame a variety of people. I, among others, warned the Government at least five years ago of the problems that were building up. The regulators took their eye off the ball. The Bank of England should have been more alert to the dangers of housing inflation. The banks were often dreadfully irresponsible, particularly in their mortgage lending activities, so there is quite a wide circle of blame.”

He believes the FSA will be a different beast in the future and says chairman Lord Adair Turner is a strong and serious leader. “They now recognise that they have to strengthen their staff and this is now easier because there are unemployed bankers who are looking for a job. One concern I have is that it does not degenerate into a massive box-ticking exercise and that what we are talking about is more effective supervision rather than more red tape and regulation.”

He also thinks the balance between savings and lending needs to be redressed and believes there could be scope for regulating lending products.

“I want to see an environment where people are encouraged to do more long-term savings and lending are more tightly regulated.”

In relation to the retail distribution review, he believes the FSA must recognise the challenges that small IFA firms may experience and says it has to be done on a sensible timescale but he thinks the implementation of the Thoresen report is a more pressing concern.

“The Government really does need to get ahead with the implementation of the Thoresen report which is making available generic advice because a lot of people have got themselves into trouble because they cannot afford financial advice or are frightened by it and as a consequence make bad decisions. They do need the kind of rapid rollout of that approach while the Government has been dragging its feet for years.”

He is suspicious of the idea of a single EU regulator for retail markets as the amount of cross-border retail trade is so small but he does think the wider principles governing the regulation of banks should be consistent, not just in the EU but also across all major developed countries.

“It is fairly clear the capital adequacy rules were not suitable for the current crisis. They encourage banks to lend too much in boom periods and are now requiring them to hold too much capital in downturns. They need to be operated counter-cyclically but that needs to be reformed on a European and a wider basis.”

He also thinks the issue of executive pay, as highlighted by Sir Fred Goodwin’s pension, needs to be addressed.

“I think there is a certain amount of cynicism in the way the Government are using this to detract attention from the much bigger issues but nonetheless the arrangements were utterly scandalous because this is a reward for failure.”

He believes that former Northern Rock chief executive Adam Applegarth and others responsible for the failure of their companies should also have their pensions reduced or taken away.

He suggests one way of addressing the issue of pay and bonuses in the banking sector could be for bonuses to be paid in stock which is non-redeemable until after a certain period so that people are not rewarded simply for making deals.

The economic crisis has thrown up more than a few issues for Cable to tackle and increased his workload but he says this suits him just fine.

“I am very happy doing what I am doing. I have never worked harder in my life and I have never got more satisfaction from what I do at the moment.”

Born: May 9, 1943, York

Lives: In his Twickenham constituency with his second wife, who also runs a farm in the New Forest

Education: Degree in natural sciences and economics from Fitzwilliam College, Cambridge, PhD in economics from Glasgow University, Fellow of Nuffield College, Oxford

Career: 1997-present – Liberal Democrat MP for Twickenham, including Shadow Chancellor from 2003, deputy leader from 2006 and acting leader from October to December 2007; 1990-97 – Shell International, including chief economist from 1995; 1983-90 – special adviser on economic affairs to Commonwealth Secretary General Sir Sonny Ramphal; 1976-83 – deputy director of Overseas Development Institute, including a period working as special adviser to Labour leader John Smith; 1974-76 – first secretary in diplomatic service in Foreign and Commonwealth Office; 1968-74 – economics lecturer at Glasgow University; 1971-74 – Labour councillor, Glasgow City Council; 1966-68 – Treasury finance officer in Kenyan government

Likes: Good South Indian food, walking, cycling, climbing, ballroom and Latin dancing, speed

Dislikes: Wholesome food like boiled vegetables, traffic jams, Heathrow airport

Favourite book: A Suitable Boy by Vikram Seth

Favourite film: The African Queen

Favourite music: Mozart’s Don Giovanni and The Magic Flute

Career ambition: To translate his current activity into real success for the Liberal Democrats at the next election

Life ambition: Write good books

If I wasn’t doing this I would be…Writing


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